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Ericsson (ERIC) Gains But Lags Market: What You Should Know

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Ericsson (ERIC - Free Report) closed the most recent trading day at $12.69, moving +1.04% from the previous trading session. This change lagged the S&P 500's 1.4% gain on the day.

Prior to today's trading, shares of the telecommunications equipment provider had lost 7.17% over the past month. This has lagged the Computer and Technology sector's gain of 7.26% and the S&P 500's gain of 1.07% in that time.

ERIC will be looking to display strength as it nears its next earnings release, which is expected to be July 16, 2021. In that report, analysts expect ERIC to post earnings of $0.14 per share. This would mark year-over-year growth of 40%. Our most recent consensus estimate is calling for quarterly revenue of $6.65 billion, up 15.83% from the year-ago period.

ERIC's full-year Zacks Consensus Estimates are calling for earnings of $0.78 per share and revenue of $28.53 billion. These results would represent year-over-year changes of +21.88% and +12.07%, respectively.

Any recent changes to analyst estimates for ERIC should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ERIC is holding a Zacks Rank of #3 (Hold) right now.

Looking at its valuation, ERIC is holding a Forward P/E ratio of 16.21. This valuation marks a discount compared to its industry's average Forward P/E of 20.43.

Meanwhile, ERIC's PEG ratio is currently 1.81. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Wireless Equipment industry currently had an average PEG ratio of 2.21 as of yesterday's close.

The Wireless Equipment industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 190, which puts it in the bottom 26% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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